View from the Wing

I don't know if they originated in Las Vegas but Vegas heartily adopted resort fees a decade ago and now the maximums are nearing $40/night. Frommer's travel guide aggregates the information [1] so tourists can make an informed decision about total cost. Although a clearly critical article [2] suggests the fees are to blame for lower attendance in Vegas, the Review Journal article they cite [3] has a much more balanced view and suggests other contributing factors such as unfavorable exchange rates and twelve states recently legalizing gambling. Regardless, the RJ article still mentions "MGM Resorts CEO Jim Murren told Wall Street analysts during the company’s earnings call on Aug. 2 that his company was forced to cut Las Vegas hotel room prices during the second and third quarters to draw leisure travelers because conventions didn’t fill enough rooms." I can only speak for myself but I stopped going to Vegas a decade ago as I'm not really the target audience; except for poker I don't gamble. From my perspective you can only see so many Cirque Du Soleil shows and I've done all the touristy stuff around like hiking the canyons, visiting their museums and seeing the Grand Canyon. Vegas has some great food and I wouldn't mind dropping in to Lotus of Siam to see if they're still good or even Baby Stacks for some adobe rice but otherwise I don't miss the place. These days it's cheaper and more convenient to spend a weekend in New Orleans. Those resort fees will easily pay…

You can add airlines to that list. Here's[1] an article that goes into it a bit. American Airlines actually loses money on their whole "flying people around" business. All of their profit last year was derived via selling points/miles for their frequent flyer program. And it's not limited just to American - I'm not sure about foreign carriers, but it's really common for US legacy carriers to derive substantially all of their profit from marketing revenue related to their loyalty program. [1] https://viewfromthewing.boardingarea.com/2019/01/24/earnings-release-a…

It happens: https://viewfromthewing.boardingarea.com/2018/12/03/nightmare-scenario…

It's not entirely a market decision due to earlier government regulation: baggage fees are not subject to excise tax, so if an airline could charge $5 for your ticket and $600 for your bag they would be way ahead, even if you'd rather not have checked it. https://viewfromthewing.boardingarea.com/2015/04/21/the-real-reason-ai…

This was actually not an "overbooking" incident in the usual sense. United wanted the seats to move some of their own crew members (reference: http://viewfromthewing.boardingarea.com/2017/04/11/real-reason-man-dra…

There's a much better analysis, to your point, here: http://viewfromthewing.boardingarea.com/2016/02/16/45332/ Apparently gogo has a faster, better offering, so American could also just be suing to get themselves a better position in line to get upgraded, or preferred pricing on the faster service. Or just to be able to switch, as you point out.

More complicated because of the way first class travel works. Somewhere between* 10% and 50% of (domestic) first class seats are filled by paying passengers. So the other 90% - 50% are either empty, or filled with elite flyers who paid for an economy ticket and got upgraded. So in almost every flight, the real cost to AA is the cost of having a golden ticket passenger filling a 1st class seat, vs. having either an empty seat or elite upgrade passenger filling that seat. In either case, the actual cost to the airline is far far less than the actual cost of a 1st class ticket. *http://viewfromthewing.boardingarea.com/2014/12/12/many-domestic-first…

* https://www.washingtonpost.com/news/wonk/wp/2016/02/18/i-dare-you-to-r… * https://www.washingtonpost.com/posteverything/wp/2015/01/21/whats-behi… * http://www.slate.com/articles/business/moneybox/2013/07/abolish_tippin… * http://www.esquire.com/food-drink/restaurants/a23132/why-tipping-shoul… * http://www.wagehourlitigation.com/files/2015/10/cornell.pdf * https://news.ncsu.edu/2012/04/wms-rusche-restaurants/ * http://viewfromthewing.boardingarea.com/2016/02/19/45436/ * http://business.time.com/2013/11/18/worst-restaurant-customers-ever-us… * http://www.npr.org/templates/story/story.php?storyId=1329241 * http://www.tippingresearch.com/uploads/JFSBR_race_revision_article.pdf This is not (just) my opinion.